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President Obama won himself a second term by scaring the hell out of Americans and suppressing voter turnout for Romney. Having successfully won the election, we must now face the looming disaster that is the Affordable Care Act (AKA, Obamacare).

While there are always unintended consequences which flow from new legislation, it’s not always a sure thing a new law will solve the problem(s) it was created to solve. Unfortunately for us all, Obamacare will cause many more problems than it ever hoped to fix. Here are just a few of the problems you can expect to see…A Mass Employer Exodus
One of the central promises made by President Obama was, “If you like your healthcare plan, you can keep it.” For millions, the first thing they’ll lose is the healthcare plan they had hoped to keep. Why? Because Obamacare offers an incentive for companies to drop employee coverage.

In July, Deloitte released a study indicating that 10% of companies would likely drop coverage and send employees into the new government-run exchanges once Obamacare was fully implemented. Unfortunately, that number is low. The actual number will likely become 30% and more within the first two years of Obamacare’s implementation.

As the president has often said, “do the math!” Today, most companies pay, on the low end, $8,000 to supplement healthcare for each employee. While there is a tax incentive involved, it still amounts to a significant burden for every business operating in the United States. On the other hand, if the company were to drop coverage and send employees into the exchange, under Obamacare, they would pay a yearly penalty of just $2,000 per employee.

While most companies want to offer healthcare to employees as a benefit, once some companies begin to drop healthcare, other companies will be forced to follow simply to remain competitive. The cascade effect, which no one seems to be discussing, will create a huge wave of workers who will lose their employer-based plans. Will the public exchanges be able to handle this demand? That is uncertain.

Fewer People Insured
Another of the president’s stated goals for the creation of Obamacare was to help insure the estimated 30 million currently uninsured in this country. In the short run (two-to-three years after Obamacare is fully implemented), that number will rise; perhaps even to 50 million or more. Why would that happen? There are a few reasons.

First, as employers begin to drop coverage and send employees into the exchange, there will be a backlog of those seeking coverage. The system is government-run, therefore it will be slow and inefficient, especially at the beginning. While the government plans to subsidize healthcare for those making roughly $80,000 per year and below, it will still require time to acquire even the lowest level of care through an exchange.

At the same time, in the first two years, the tax penalty for carrying no insurance is very low; just $285 per family in 2014 and $975 per family in 2015. In 2016, the tax penalty is still only $695 per adult and $347.50 per child (up to $2,085 for a family) or 2.5% of family income, whichever is greater.

With such low penalties, and a requirement that insurance companies accept pre-existing conditions, there are millions who will seek insurance only when necessary rather than bearing the personal burden of finding and paying for medical care. Even without this incentive to forgo health insurance, the CBO recently projected that, by 2022, 30 million non-elderly Americans will remain uninsured.

So, in ten years (eight years after full implementation) 30 million Americans will remain uninsured. This leaves one of the central goals of Obamacare unfulfilled. Thus we know, even before Obamacare is fully implemented, that it has already failed in a fundamentally important way.

A Vast New Federal Expense
One of the greatest burdens borne by European nations with socialized healthcare is the vast expense involved in funding and managing levels of care for citizens. The financial burden, even of US-based plans such as Medicare and Medicaid comes from the fact they are “defined benefit” plans rather than “defined contribution” plans.

Employers in the US offer defined contributions to employees’ healthcare. That is, they pay the lion’s share of the cost, but do not cover the entire cost. The additional expense is born by employees, which creates some market pressure on insurance companies to offer the best care possible. If an employer does not like the coverage employees are receiving, they can choose another company.

With the defined benefit system, the government covers all expenses except for possible co-pays. This means that, as healthcare costs increase, government bears the burden of the increase. While government does what it can to keep costs under control, they tend to go up much faster under defined benefit plans because of the lack of downward market pressure on doctors, hospitals, and insurance companies.

At a time of record deficits and national debt, President Obama and Democrats have chosen to add this vast new burden to the federal and state budgets. While there were initial claims that Obamacare would be “revenue neutral,” these claims have since been debunked as even the CBO has reported. The fact is, Obamacare will cost even more than predicted by the CBO.

Just as the Republican “Medicare Part D” plan cost roughly twice as much as promised, Obamacare too will cost more than anticipated and calculated by Washington number crunchers. In some ways, it already has, with health insurance premiums still rising sharply, even with partial implementation of Obamacare.

Summary
Beyond all of this, in 2013, a series of new taxes will go into effect to fund Obamacare. These taxes will have a negative impact upon the economy, as can already be seen by a recent wave of layoffs as well as additional layoffs to come. The burden of Obamacare has many companies struggling to find ways to deal with its new mandates. For many employers, this will mean a reduction in the size of their workforce.

Will employers choose to end healthcare coverage in favor of keeping their workforce? They may. But, one way or another, Obamacare will add significant disruption to an already-shaky economy, and significant debt to an already-historic deficit.

23 Responses to “The Unaffordable Care Act”

What scare tactics are you referring to, and do you have actual credible proof of the Democrats suppressing votes?

2

Snow Crash Says:
November 19th, 2012 at 9:16 am

BTW, that article you linked to from the daily beast talks about how he lost some of the votes from various ethnic groups and how voter turnout wasn’t as big as 2008, which all may be true, but he won by almost 10 MILLION votes in 2008, he had quite a buffer for 2012.

How about the ad from the Obama Campaign which declares that Romney is “not one of us”? How about “the war on women,” and “Romney killed my wife.” A torrent of negative ads that I think was a deliberate tactic to keep independent voters from coming to the polls. Everyone knew that Romney would win independents, so they used the negative ads to discourage independents. Low turnout favors the incumbent, just as Medved states in his article.

4

Snow Crash Says:
November 19th, 2012 at 12:46 pm

David, do you not think Romney spewed his own negative ads?

Fox News is not much more than a giant anti-Obama/anti-Democrat bullhorn. I really hope you don’t need me to pull examples from that machine, many are quite disgusting. MSNBC can be disgusting as well, but Fox is a whole different animal, plus, as O’Reilly brags, they are the most watched news source in the business! So plenty of people hear their garbage.

I agree that those ads are disgusting as well, but I don’t think they played a huge role in the outcome of the election. Most people become sick of ads, especially in places like Ohio where they ran well over 300X per day.

Republicans just need to face the facts:
– The US is becoming more liberal and more people are adopting liberal (or what is often seen as liberal) ideals. More states are passing laws allowing gay marriage, two states passed laws legalizing marijuana, the first openly gay senator was elected, the latino population is growing, etc. Many people now view traditional Republicans as the old grouchy group who are afraid of progress.

– It is perceived by many that Republicans have swung way too far to the right. The loud lot of you have seriously gone bat-sh*t insane. As McConnell said “the most important thing we want to achieve is to make sure Obama is a one-term president.”. People notice that stuff, and it says that the right doesn’t give a crap about what matters most right now, the economy, instead they have some huge hardon to get rid of the President. This was literally from day one.

– People also notice when prominent Republicans say completely asinine things like “women have a mechanism to shut down pregnancy in the case of r@pe.” or “47% of the country doesn’t pull their weight”. People notice things like the outrage Murdoch had because Christie was more concerned about his state than politics at the time.

I don’t know how many times I’ve seen it said by the right that “Obama is the worst president in US history”, yet even the best of what you guys could conjure up didn’t defeat him in an election. That should say something! It says America is becoming more progressive and you’re just gonna have to deal with it, because that’s democracy.

5

Snow Crash Says:
November 19th, 2012 at 12:57 pm

In fact, the right has even made the word “progress” a dirty word! Isn’t that sad?

America is a center-right nation. Overall, voters tend to be more moderate, and whoever wins he independent vote often wins elections. In 2008, independents went heavily for Democrats. In 2010, independents went for Republicans.

Right now, Republicans have a solid majority in the House and 45 members in the Senate. They control 28 governorships and 27 of the state legislatures to the Democrats’ 19. That supports what I say regarding the country being center-right. When you consider that West Virginia is controlled by Democrats, yet is quite conservative, it underscores my point.

In regards to Romney’s ads, you’ll find that they attacked the president’s record, which was pretty easy to do. But they didn’t get personal. The personal stuff, which every president gets from both left and right, was from individuals, not the GOP. Obama, on the other hand, got very personal. One ad said of Romney, “he’s not one of us.” Imagine the firestorm if Romney had produced such an ad! They accused Romney of waging a war on women, of killing a man’s wife, of hiding funds in secret offshore accounts, of having a bad singing voice, of having a show horse. I could go on like this for a while.

Do me a favor name ONE ad from the Romney campaign that was a personal attack on the president. There were none.

All that said, what does that have to do with the main point of my article, which is that Obamacare is going to be a disaster?

One thing not mentioned in the article is that the healthcare turmoil will disproportionally hurt the poor and middle classes, those workers who rely on healthcare insurance through their employers. The rich fat cats liberals love to hate will be just fine, in fact, better off.

Its already happening.
Anyone with a policy has seen their premiums jump as much as 30%
Employers are shifting more of the cost to employees, or giving the difference in cash to employees,enabling them to shop for their own.
Providers are offering less coverage.
Practitioners are becoming less willing to take or process Medicaid/cair because they cant absorb the lag or cut in reimbursement.

“People also notice when prominent Republicans say completely asinine things like “women have a mechanism to shut down pregnancy in the case of r@pe.”

Yeah, everyone on the left and right condemned that idiocy. BTW, he included “legitimate” which is even more retarded.
Thats just one example on a social issue that liberals hung their hat on as being part of the stupid “war on women” which was taken as seriously as Sandra Flukes cry for free contraception because it was soooooooo hard to access.

Thanks to the moonbat media we dont get to hear as often the dumb crap that flows from liberal pie holes.

“We have to pass the bill before can see whats in it.”

“Vote for revenge”

At some point you’ve made enough money”

“Those making less than a billion, a million, 500 K, 250 K,… will not see their taxes go up one cent (Sorry Joe, thats a big fat lie, as we now know)

“47% of the country doesn’t pull their weight”.

Thats not what he said.
Mitt was referring to welfare based programs as opposed to “real entitlements”. You know, programs people are actually entitled to and paid into and do deserve such as unemployment,SS, medicaid/cair.

As far 47% not carrying their weight.
I’m sure you know by now that Americas richest 2% (you know, those fat white rich racists)cover a very disproportionate 60% of the countrys bills

14

buzzbee Says:
November 20th, 2012 at 12:05 pm

There is no shortage of news, those things you mentioned were ever-present (even with your spin in many cases).

This idea that the “real” or right wing news is kept secret is simply not true.

Fox News (the most-watched is what I always hear and by a lot of people that identify as Democrats), my entire political radio dial, numerous magazines and no shortage of websites.

If people simply didn’t buy into the “story” it doesn’t mean it was not available.

“This idea that the “real” or right wing news is kept secret is simply not true.”

My point is that an ever decreasing population knows what true conservatism is.
It has nothing to do with race or oppression of minorities as has been shoveled into everyone’s head by the left and the pieholes in the dominant liberal media.
Its safe to say Obama is the most socialist president we’ve ever seen. Consequently so are those who elected him based on his socialist views.
Its not safe to say Mitt Romney,Bush or conservatives are the party of N@zis and fascism for the simple fact theres nothing to back it up.
This is made evident by his own words praising redistribution.
It is not

“This idea that the “real” or right wing news is kept secret is simply not true.”

My point is that an ever decreasing population knows what true conservatism is.
It has nothing to do with race or oppression of minorities as has been shoveled into everyone’s head by the left and the pieholes in the dominant liberal media.
Its safe to say Obama is the most socialist president we’ve ever seen. Consequently so are those who elected him based on his socialist views.
This is made evident by his own words praising redistribution.
Its not safe to say Mitt Romney,Bush or conservatives are the party of N@zis and fascism for the simple fact theres nothing to back it up.

17

buzzbee Says:
November 20th, 2012 at 3:16 pm

So, because I voted for Obama I am a socialist.

Fascinating.

That will be a surprise to my friends who openly acknowledge that I am a pure capitalist and borderline profiteer and price gouger that competes in a dog-eat-dog sector of business.

Yeah Buzz, unfortunately I can distinguish those that would benefit from Barrys policies financially against the masses that just wanted “stuff”.
Barry offered goodies.
Mitt offered fiscally responsible policies with talk of entitlement reform.
Obviously this wasnt sold well enough and/or the majority had no concern for the debt they’ll lay on next generations.
I refuse to believe Barry got elected because he was doing such a great job with the economy.

19

buzzbee Says:
November 20th, 2012 at 8:18 pm

Maybe he got elected because most people didn’t recognize anyone as representing a viable alternative.

20

buzzbee Says:
November 20th, 2012 at 8:24 pm

Maybe some saw a sesible economic plan with Romney, but either voted for Obama or failed to vote because the current primary system of the GOP requires a candidate to get on board with “all the other stuff”, which many see as madness.

21

buzzbee Says:
November 20th, 2012 at 9:21 pm

There is a column on chain restaurant owners’ absurd whining about Obamacare with special attention to John Metz who owns a bunch of Denny’s franchises.

Metz said he was going to start placing a special Obamacare surcharge on customers’ checks, and advised people that if they didn’t like it they could just tip their servers less. Today the news comes that he got a stern talking-to from the Denny’s CEO and is backing down on the plan.

Evidence from San Francisco suggests we should be very suspicious of firms pleading poverty as they charge surcharges. The city adopted pioneering universal health care legislation that, like Obamacare, imposed higher costs on some classes of employers.

Many of them responded with special health care surcharges. Upon investigation, much of this surcharge money just ended up in the pockets of business owners, as with any other price increase.

22

RonM Says:
November 21st, 2012 at 6:16 am

buzzbee – You’ll be seeing a lot of scamsters/opportunists using Obamacare as an excuse to line their pockets. Or to layoff workers they would have anyway to avoid bad publicity. I’ll bet the average American would go out of their way to patronize a responsible employer who provided their workers basic and reasonable wages and benefits. Just like we deride products made in overseas sweat shops.

“Maybe he got elected because most people didn’t recognize anyone as representing a viable alternative.”

Obama is not a viable alternative.
In a variety of terms hes made it clear he wants to redistribute wealth.
This is no far right theory.
Its fact. He said its what he wants to do.
Were you asleep the last four years ?
The only dept Obama is viable in is the gifting dept.
The economy has been worse under his ineffective repairs, his foreign policy is a disaster.
That leaves many people with only one reason to elect him
Sure, not every vote was for freebees, guys in pharmaceutical sales like you stand to make a killing on anti depressants alone.